If I were persuaded by your argument, then I suppose the thing to do now would be to short US treasury Bonds now (I have not investigated how to do that), expecting to cover in the 3rd & 4th qtrs of 2009.

But back to your argument: just what is it? You assert there is the biggest bubble in history in these bonds. You allude to history proving we should get 20% - 50% gains later this year. If history is a guide, why is it guiding only us? Would not larger inverstors already be shorting these bonds and squeezing out the margins whereby we smaller investors would hope to profit? If treasury bonds collapse, the biggest of the big guys will be bailed out once again by we taxpayers. But we little guys will not be bailed out.

"The US Treasury bubble burst should spark a monster Stock Market rally in 3rd & 4th qtrs of 2009."

Earnings for Q3 and Q4 could very well disappoint. Even if your prediction plays out, consumer sentiment could dip again, and this money wouldn't necessarily come back to stocks. I wouldn't be suprised to see the rally continue, but there's lots of downside risk from where we're at, and I wouldn't say that now is the ideal time to go long.

The MSCI Emerging Markets Index advanced 2.6 percent to 803.27 as of 12:55 p.m. in London, the highest intraday level since June 3. The index has climbed 11 percent the past five days as better-than-estimated earnings from Russian banks to Chinese energy companies bolstered speculation the worst of the global recession has passed.

“The broader equity market is in a cyclical bull” rally, Nader Naeimi, an investment strategist at AMP Capital Investors, which manages about $95 billion, said in an interview with Bloomberg Television from Sydney. “You’ve had some really decent moves in currencies and commodities as well. Risk appetite has shown signs of life.”

Benchmark equity indexes in every major emerging market open for trading climbed today. China’s Shanghai Composite Index advanced 2.4 percent, the most in seven weeks, to the highest level since June 2008 as commodity-related companies jumped. Russia’s Micex and Poland’s WIG20 Index led the rally in emerging markets, as both advanced 3.5 percent.

Bond Spreads

The extra yield investors demand to own emerging-market bonds over U.S. Treasuries rose two basis points to 4.03 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index. The gauge declined 49 basis points last week, the biggest weekly drop in two months, to the lowest since Sept. 26.

Cnooc climbed to the highest level since June 15 and Norilsk Nickel advanced to the highest since June 17. KGHM Polska Miedz SA, Poland’s sole copper producer, surged 4.7 percent.

Crude rose above $64 a barrel in New York as Chinese refiners boosted processing to a 16-month high. Copper gained in Shanghai for a fifth day, heading for the longest rally since March.

Tata Consultancy climbed the most since May 18 after first- quarter earnings rose 23 percent on lower costs and a weaker dollar that boosted the value of overseas earnings. The company said Citigroup Inc. is helping lead a recovery in demand from financial clients.

Ruble, Rand

The Kospi has recouped all its losses since Sept. 12, the last trading day before Lehman Brothers Holdings Inc. declared bankruptcy, roiling credit and equity markets worldwide. Morgan Stanley raised its price target for the index by 23 percent, citing a positive earnings outlook for exporters and lower valuations.

The ruble headed for its strongest close since July 3 against the dollar on the rally in oil, Russia’s chief export. Malaysia’s ringgit led gains in Asian currencies, rising 1 percent against the greenback. South Africa’s rand appreciated 0.9 percent on the advance in commodities and after Absa Group Ltd. Chairwoman Gill Marcus was named as successor to central bank governor Tito Mboweni.